Brazil's Petrobras to stop taking subsidized state bank loans: CEO

2 Min Read

FILE PHOTO: Roberto Castello Branco, the new CEO of Brazil's state-run oil company Petrobras, delivers a speech at a ceremony marking his taking over the firm, in Rio de Janeiro, Brazil January 3, 2019. REUTERS/Sergio Moraes/File Photo

“This cycle in which Petrobras used loans from public banks, with differentiated interest rates to finance its projects, is over,” Branco said in a statement.

“We believe that large companies that have easy access to the financial markets do not need to be subsidized with public resources that should be invested in programs in favor of society.”

New Brazilian President Jair Bolsonaro has released a list of the 50 largest borrowers at state-controlled development bank BNDES, which showed Petrobras to be the leading recipient of credit lines and equity capital disbursed by the bank.

Bolsonaro, a far-right politician who took power this month, has railed about BNDES’ allegedly corrupt lending practices in building “national champion” companies under the leftist Workers’ Party governments from 2003 to 2016.

Joaquim Levy, a former finance minister and the new CEO of BNDES, used his swearing-in speech to pledge transparency.

For several years now, BNDES has been trying to divest assets and stakes in public companies. Levy’s predecessor said last year that it “makes no sense” for the Brazilian development bank to hold stakes in companies such as Vale (VALE3.SA), Eletrobras (ELET6.SA), JBS (JBSS3.SA) and Eletropaulo (ELPL3.SA).

Earlier this month, Levy said the pace of sales of stakes owned by the bank’s investment arm will depend on prices and the market impact of the transactions.